Ecommerce Payments: How to Accept Online Payments for Your UK Business

Setting up online payments is faster than it has ever been. A new Stripe account can take card payments within minutes of creation. The harder work is building a payment setup that does not lose customers at checkout, keeps compliance manageable, and remains cost-effective as volume grows.

In this guide, we cover how ecommerce payment processing works, how to choose the right gateway, what checkout UX decisions affect conversion, what PCI compliance actually requires, what you are paying in fees, and when to move beyond a payment service provider to a dedicated acquirer.

How Ecommerce Payment Processing Works

When a customer enters card details at your checkout, the data passes through a payment gateway that encrypts it and routes an authorisation request to the card scheme (Visa or Mastercard) and the customer’s issuing bank. The bank approves or declines. The result returns to your checkout in seconds.

Settlement — the actual movement of money — happens separately. If you use a payment service provider (PSP) like Stripe or PayPal, they hold the funds in their own merchant account and pay out to your bank on a set schedule.

If you have a dedicated merchant account from an acquirer, the acquirer settles directly.

Card-not-present (CNP) transactions — all online payments — carry higher interchange than in-person card payments because the fraud risk is higher without chip-and-PIN or contactless authentication.

This is why online payment rates are slightly higher than in-person rates from the same processor. We explain the fee stack in more detail in the fees section below.

We cover the full cost breakdown in the fees section below, but the key point is that what you see quoted is a blended rate covering interchange, scheme fees, and the processor’s margin all in one number.

Choosing a Payment Gateway for Your UK Ecommerce Business

For most UK ecommerce businesses from launch to around £50,000/month in card volume, Stripe is the default-sensible choice. Published rate: 1.5% + 20p for UK cards. No monthly fee, no contract, integrates natively with every major ecommerce platform (Shopify, WooCommerce, Wix, Squarespace, Magento).

The API is the best-documented in the industry.

PayPal is worth adding alongside Stripe rather than instead of it. A meaningful share of UK online shoppers have a PayPal account and prefer using it over entering card details. Adding PayPal at checkout increases conversion for that segment. PayPal charges 1.2–2.99% depending on account tier and transaction type.

Checkout.com and Adyen sit in a tier above Stripe — better pricing at scale, more sophisticated fraud tooling, more flexible routing. Both require a minimum monthly volume conversation before they will quote. Worth evaluating at £100k+/month, not before.

Worldpay and Barclaycard Payments are the largest UK acquirers by merchant count. Traditional contract-based products with interchange-plus pricing available. The application process is longer than a PSP sign-up, and the onboarding experience is dated compared to Stripe. The trade-off is lower unit economics at volume.

We have not listed Opayo (formerly Sage Pay) or other legacy UK gateways as first choices because their pricing and developer experience lag behind the options above. They remain an option if you are already integrated with Sage accounting software and want tight integration.

Do you need both a gateway and a merchant account?
Not necessarily. PSPs like Stripe and PayPal bundle the gateway and merchant account function in one product — you do not need to set them up separately. A standalone gateway (Opayo, Checkout.com in gateway-only mode) requires a separate merchant account from an acquirer. The bundled approach is simpler for most businesses until volume justifies unbundling.

Checkout Conversion and Payment UX

Checkout abandonment averages around 70% across ecommerce. Not all of that is payment-related — price, shipping cost, and account creation friction drive most of it — but the payment step is where the final drop-offs happen, and small changes make a measurable difference.

Guest checkout is the single highest-impact option. Forcing account creation before purchase consistently reduces conversion for first-time buyers. Offering account creation after the payment confirmation instead of before removes the friction without losing the data.

We have seen this single change lift checkout completion rates by 10–20% for new-customer cohorts.

Showing payment method logos — Visa, Mastercard, American Express, PayPal, Apple Pay, Google Pay — at the point where the customer decides to proceed signals trust.

Displaying them early (on the product page or in the basket) rather than only at the payment step reduces cart abandonment before the checkout begins.

Express checkout options (Apple Pay, Google Pay, PayPal One Touch) reduce the number of keystrokes to complete a payment on mobile. On mobile devices, where abandonment rates are higher than desktop, express checkout can materially increase conversion. Stripe and PayPal both support these natively.

Buy Now Pay Later (BNPL) through Klarna or Clearpay can increase average order values on higher-ticket items by spreading the cost.

The merchant fee is 2–6% per transaction — significantly higher than standard card processing. The calculation is whether the average order value uplift exceeds the additional processing cost per transaction.

PCI DSS Compliance for Ecommerce Businesses

PCI DSS (Payment Card Industry Data Security Standard) is the security framework governing how card data is handled. Your compliance scope depends on how card data touches your systems — the less it does, the simpler the obligations.

Hosted payment pages (Stripe Checkout, PayPal Standard, Opayo hosted form) redirect the customer to a payment page controlled entirely by the provider. Card data never touches your server.

PCI scope is SAQ A — a short annual self-assessment questionnaire with around 22 questions. This is the right approach for most small ecommerce businesses.

Inline card forms using JavaScript tokenisation (Stripe Elements, Braintree Drop-in UI) keep the customer on your website but use JavaScript widgets hosted by the provider to capture card data.

The raw card number never reaches your server. Scope is SAQ A-EP — more questions than SAQ A but still a self-assessment.

Direct API integrations that handle raw card numbers require SAQ D — a full assessment with over 200 controls — or engagement with a qualified security assessor (QSA). The cost and complexity are significant. Almost no small ecommerce business needs to go this route.

PCI non-compliance fees are charged by acquirers when the annual self-assessment is not completed. These run £15–£30/month. Completing the SAQ A questionnaire — a one-hour task for a hosted-gateway business — eliminates the fee entirely. We cover PCI scope for each integration type above.

Ecommerce Payment Gateway Comparison (UK, 2026)

We have set out the main options for UK ecommerce businesses. Rates are published figures as of April 2026 — volume discounts and negotiated rates are available at higher volumes.

Ecommerce Payment Fees: What You Actually Pay

Stripe’s published UK card rate is 1.5% + 20p per transaction. For a £50 order, that is 95p. For a £200 order, it is £3.20. The fixed 20p component means lower average order values cost more proportionally — worth bearing in mind for businesses selling items under £10.

International cards cost more. Stripe charges 2.5% + 20p for EEA cards and higher still for cards issued outside the EEA. If a significant share of your traffic is international, your effective blended rate will be higher than the headline UK rate. Check your Stripe dashboard for the actual breakdown.

Currency conversion adds another layer. Most gateways charge 1.5–2% on transactions where the card currency differs from your settlement currency. If you sell in GBP and a customer pays with a USD card, you pay the conversion fee.

If you sell in EUR to a European customer but settle in GBP, you also pay it.

At volumes above roughly £50,000/month in UK card transactions, the economics of moving to an interchange-plus contract from a dedicated acquirer are worth modelling.

The per-transaction saving is typically 0.3–0.5% net — at £50k/month that is £150–£250/month. Monthly acquirer fees and gateway costs need to be subtracted, but the saving is usually real above this threshold.

Hidden fees to check regardless of provider: PCI non-compliance fees (eliminate by completing the SAQ), minimum monthly service charges on contract-based products, and chargeback handling fees of £15–£25 per case.

Handling Refunds, Disputes and Currency in Ecommerce

Issuing a refund proactively — before a customer raises a dispute — prevents a chargeback and saves the £15–£25 dispute fee. If a customer contacts you about a problem and the resolution is a refund, issue it immediately rather than waiting.

The cost of the chargeback fee and ratio risk exceeds the small delay in cash flow.

For chargebacks you do receive, your evidence depends on the reason code. For fraud disputes, 3DS2 authentication records are your primary defence. For service disputes, delivery confirmation and your product description at time of purchase are the key documents.

We cover chargeback defence in full in the fraud prevention and chargebacks guide.

Multi-currency selling adds complexity. The lowest-friction approach for a small UK ecommerce business is to display prices in GBP, accept all card currencies (the gateway handles conversion), and settle in GBP.

Your prices are clear, your accounting is clean, and you pay a conversion fee on non-GBP cards rather than managing multiple settlement currencies.

If you sell regularly to a specific country and the volume justifies it, opening a local currency settlement account reduces conversion fees for that currency pair. Stripe and Adyen both support multi-currency settlement — we find the operational overhead worth taking on above roughly £10,000/month in a single non-GBP currency.

Bottom line: Start with Stripe plus PayPal and keep PCI scope minimal with a hosted gateway. Model the move to an acquirer contract above £50k/month.

Frequently Asked Questions

Do I need a merchant account to sell online?
Not a dedicated one. Payment service providers like Stripe and PayPal bundle the gateway and merchant account function — you sign up with them directly and they handle settlement. A dedicated merchant account from an acquirer is only needed if you want to use a standalone gateway, or if you want the lower rates and direct relationship that come with a traditional acquiring contract at higher volumes.

What is the difference between Stripe and PayPal for ecommerce?
Stripe is primarily a developer-focused payment infrastructure platform — it integrates seamlessly with your website and the customer experience is entirely on your site. PayPal is a consumer-facing wallet that customers use to pay without entering card details. They serve different purposes and most UK ecommerce businesses benefit from offering both. Stripe for card payments; PayPal for customers who prefer using their PayPal balance or who are wary of entering card details with an unfamiliar merchant.

How do I reduce cart abandonment at the payment step?
The highest-impact changes are: offer guest checkout (no forced account creation), add express checkout options (Apple Pay, Google Pay) for mobile users, display payment logos early in the checkout flow, and keep the form fields to the minimum required. For returning customers, saved card tokenisation (available through Stripe and most gateways) eliminates re-entry friction. Speed also matters — a slow gateway redirect or checkout load adds measurable abandonment.

When should I move from Stripe to a dedicated acquirer?
The break-even point depends on your card mix and the acquirer’s monthly fees, but most ecommerce businesses find the economics start to favour a dedicated acquirer around £50,000/month in card volume. At that volume, saving 0.3–0.5% per transaction covers the monthly fixed costs and generates a net saving. Get quotes from Worldpay, Barclaycard Payments, and Checkout.com — then model the break-even against three months of your actual Stripe statements.

What PCI compliance do I need for an online shop?
If you use a hosted payment page (Stripe Checkout, PayPal Standard), your scope is SAQ A — an annual self-assessment questionnaire of around 22 questions that takes roughly an hour to complete. If you use an inline card form with tokenisation (Stripe Elements), your scope is SAQ A-EP — more questions but still self-assessment. Direct handling of raw card data requires SAQ D or a QSA engagement, which almost no small ecommerce business needs.

Can I sell internationally from a UK ecommerce business?
Yes. Stripe, PayPal, Checkout.com, and Adyen all support international card acceptance from a UK merchant account. You will pay higher interchange on non-EEA cards and a currency conversion fee on non-GBP transactions. For most businesses starting out, pricing in GBP and accepting all card currencies through Stripe is the simplest approach. As international volume grows and you identify specific high-value markets, localised checkout and currency settlement become worth the additional operational overhead.

How we put this guide together

This guide draws on published pricing from Stripe, PayPal, Checkout.com, Adyen, Worldpay, and Barclaycard Payments as of April 2026, PCI DSS framework documentation (PCI SSC), and Visa and Mastercard interchange schedules.

Checkout conversion data referenced (70% average abandonment) reflects industry-reported ranges from publicly available ecommerce research. We have not attributed this to a single source as the figure varies meaningfully by sector, device, and checkout design.

This is editorial guidance, not regulated financial advice. We have no commercial relationship with any payment provider named in this article.